Digital Business Transformation — A Blue Ocean

Back in June I did a keynote presentation in the Digital Transformation Conference (Greece) by Boussias. When the organizer asked me to select a topic around the current state of the Digital Transformation and some industry trends, I realized that, what we call, the “Digital Transformation” sector is still a Blue Ocean.

Most of the time, the term “Blue Ocean” sounds strange. Digital transformation is the hype of our era and everyone is trying to hop on the train, so why do we believe that this industry is still a “blue ocean”? Shouldn’t most companies have already been transformed? Where is the resistance or failure to transform coming from?

Transform or Die(?)

I remember doing countless presentations with stats and research saying that if huge companies don’t transform digitally they will die probably in the next 5 years.

The truth is, that seven years — and a pandemic — later we tried to see actually how many companies have gone extinct. And what we discovered was extremely interesting.

First of all, humans are notoriously bad at making good predictions. Although there have been about 150 changes to the S&P 500 since 2015, the companies that no longer exist — especially because they didn’t keep up with Digital Transformation — are probably minimal. So, the catastrophe we may have been waiting for, did not come (at least not yet).

One would therefore expect that with all the urgency that exists, with all the hype and resources available, the companies would have made significant progress in their digital transformation.

Nevertheless — and especially in Greece — companies still have many challenges to overcome regarding how to manage their digital transformation.

Why companies don’t change (fast)?

Now, let’s get a bird’s eye view on why this happens and how one could deal with it.

First, we should all agree that Digital Transformation has nothing to do with Digital. It may sound a bit paradoxical, but a key misconception that exists in companies is that we often start the digital transformation conversation as if we were talking about a purely technical project. For example, if we use the X CRM or if we digitize a process, if we make a mobile app or if we change to electronic invoicing, we will (finally!) be digitally transformed. That is why in many cases the burden of Digital Transformation falls — unfairly in my opinion — on IT departments.

What we need to understand is that Digitization — that is, digitizing things that we have done so far in analog or manual ways — is NOT Digital Transformation.

So, what is digital transformation all about?:

Therefore, Digital Transformation is about a holistic change and it cannot be just about technology. The biggest challenge is not technology but people.

Αnother problem is that companies do not have the know-how or the appropriate capabilities in-house to achieve this transformation. So they resort to consultants. Which brings us to another challenge. The same companies that help other companies, the consultancies, operate in an industry that is deeply traditional.

So we — the consultancies — also tackle the problem many times from a specific POV instead of holistically. Either we see it from a technology point of view (where we have IT consultancies) or purely from the user’s experience point of view (where we may have design-led consultancies) or from a specialized role (like Data Consultancies).

That’s why we believe that digital transformation is a blue ocean. Because the need — both in the companies themselves and in the consultancies — is to create a new hybrid.

A hybrid that can combine Business & People Strategy with Data and Technology, while at the same time, it can design great experiences for consumers. And we need this approach to be applied holistically in a company rather than trying to transform specific departments, in silos.

But let’s say for a minute that we manage to find this sweet spot and solve the basic pain-points in this transformational journey. What are the key characteristics of digitally mature companies?

According to a MIT Sloan survey, that observed many pioneer companies in their Digital Transformation journeys, it was found that although each company used different tools & tactics to achieve their goals, in the end, all of them had 4 common characteristics:

1- Rapid Experimentation:

Μany people believe that a transformational journey should begin with long-term plans and grandiose projects. And because, as someone famously said, “everybody has a plan until they get punched in the face” (2020 proved it spectacularly 😀), it is much more important to take small and quick steps and experiment.

When talking about experimentation we are obviously not referring to an R&D Project. Instead we suggest identifying an area for improvement, start with a small team, change your ways of working, learn, optimize and make the rest of the company so “jealous” of your speed, agility and results so that they will want to work like this.

By experimenting you can become 1% better every day.

2- Take Risks:

It is obviously one of the biggest clichés. The point behind this, however, is to instil into the company culture that the risk and the — expected — failure in some projects is ΟΚ, as long as it brings validated learnings and moves the organization forward.

Especially in corporate environments where failure in a project may be considered a career killer, you will need to make a great effort — and especially the senior leadership — to stop the “risk taking attitude” being considered just a cliché.

3- Invest in your own talent:

And we can’t stress this enough. Many companies rely on external consultants to bring them solutions and implement them. And even though it is not a bad practice, no successful long-term transformation has happened only with outside help. That is why, in order to become a digitally mature company, you must develop the capabilities internally so that you can run enough initiatives without external help.

At Reborrn, in most of the projects we start, we insist that our clients hire or appoint some people internally who will take care of the continuation of the projects, and who will ensure the proper knowledge transfer internally in the organization. For us, success is to become obsolete.

4- Value soft skills:

Companies often tend to believe that they need super tech savvy people to make a difference. The truth is that in change — and especially in turbulent change — the soft skills of leadership count far more than any technical understanding of the issue.

We have a typical case study of a customer abroad with 2 business units in the same company. In the first business unit, we have a General Manager with very strong soft skills and the ability to give her people the freedom to do what they think is right. In the other business unit, a General Manager with much stronger technical/digital skills but not strong soft skills. Unfortunately, in the second case the whole process did not go as smoothly as in the first (although we thought the opposite at first).

We should all be aware that a digital transformation journey should be treated as a marathon which will last for quite a long time, and not as a simple sprint. And, the key that could bring us closer to success, is taking risks and owning them, while having onboard capable people who believe in transformation and doing their best to make it happen.

But you may resist and ask: “What if we fail in this project and lose resources?” Well, that’s ok. Failing, understanding why, and trying again is much better than failing to act and realizing a few years down the line that you are left with no options.

This article is derived from Costas Mantziaris’ ,REBORRN Co-Founder, presentation in the Business Digital Transformation Conference. Opinions are mainly focused on the Greek market. Watch the full presentation (in Greek)